Most resellers continue to be successful at targeting IT departments, but fail at pitching to nimble line of business customers, such as marketing and HR departments.
This was the thrust of a presentation from distinguished Gartner analyst Tiffani Bova, who packed out two sessions during Microsoft's Worldwide Partner Conference in Orlando. Bova is one of the star attractions at Microsoft's Australia Partner Conference later this year.
Telling the packed house "I want to make you uncomfortable", Bova outlined 10 top trends in IT sales for the channel and how to capitalise on changing buyer behaviour.
There's no secret that line-of-business buyers are controlling an ever-increasing share of spend – many CRN readers will have heard Gartner's predictions about that shift, such as the prediction that the chief marketing officer will control more IT spend than the CIO by 2017.
It's not about forgetting the IT manager, but learning to sell in dual ways. Bova said there are now "two speeds of IT" and that solution providers "have to run at both modes".
"One is traditional – think marathon runner, long-term projects, longer sales cycles, big-ticket items, selling to IT, sourcing and procurement, refreshing my data centre. I am redeploying an ERP solution or CRM or BI. It's heavy. It's long. It's intense. It's scope of work. It's delivery organisations. It's keeping the lights on."
She said that 65 percent of the IT budget today "gets spent on that side of the house".
"Mode two is all about agility. Speed to market – I see it, I try it, I buy it. It doesn't work, I try something else. Once I realise that's what I want, I want to deploy more broadly."
She told the audience, "I don't want you to hear 'cloud/non-cloud'."
"If you refresh a data centre, and go from on-prem to standing up infrastructure-as-a-service, for example, that would still be speed one. It is still all about keeping the lights on. I want you to think about innovation and transformation spend, that's what happens in mode two," said Bova.
The channel is "very comfortable in mode one" but struggles with mode two. And it's not just sellers: most of the CIOs that Gartner deals with are "super comfortable" in speed one. However, they are being pushed by their CEO to get into speed two.
Australian partners were enthusiastic about Bova's session.
Ronnie Altit, managing director of Sydney-based Insentra, said: "The biggest thing I took out of the presentation is the number of channel partners that will struggle to make the transition as customers move from mode one to mode two."
Startups have an advantage over established IT suppliers. "If you are going to start now, start at mode two. Those who are in mode one have got a big transition ahead of them that I think they will struggle with. She absolutely nailed it in terms of what the market is doing. It was probably one of the most insightful presentations I have had at WPC."
As a first-time attendee at the Microsoft conference, Altit said he was impressed that WPC "wasn't so much about the product, it was about how partners can become successful with Microsoft".
Noel Ervine, director of Melbourne-based Emerging IT, told CRN that he was grappling with the mode one/mode two issue in his business. "I can see we need to push mode two but I can see myself and my colleagues in mode one, we need a blend."
Stephen Parker, VP of market research at Rhipe, formerly NewLease, said it was about hybrid selling, and that both modes have their place.
"Every time there is a change in our industry, every new guy has to say, 'You are at the bottom left and we are at the top right. That's the only way to get noticed. Actually, over time, it all merges and that becomes the new normal.
"Salesforce used to be 'no software' but increasingly they integrate into your back end. As they get into the enterprise, they have to integrate with your on-premise resources."
He agreed with Bova that cloud did not necessarily equate to mode two. "Just outsourcing to IaaS is still mode one. You have just outsourced and it is still the same infrastructure, the same model. You just don't own the hardware."
Steven Kiernan is a guest of Microsoft at Worldwide Partner Conference and is also speaking at the 2015 Australia Partner Conference.